Can Casinos Save Coney Island, or Will They Be It's Downfall?

Updated on October 13, 2012

The Coney Island death watch is still on. Even as condo developers have seemingly cooled off to the idea of building in Coney Island's amusement center, an old threat has re-emerged. Thirty years ago there was a movement to bring gambling to Coney Island. Atlantic City had done the same and was then perceived as a success. New York City was still in financial trouble and looked to casinos as a quick fix. Land owners ceased leasing their property to amusement operators and tore down entire blocks worth of buildings in anticipation of selling their land to casino developers. The once vibrant amusement center became a desolate wasteland within a couple of years with only a few acres remaining untouched by the devastation. The state legislature ended up voting against gambling, and Coney Island never recovered.

Had gambling been legalized, there is little doubt that the remaining amusements would have been swept away by casino development. But others disagree, including many local Coney Island businesses. They believe that a casino will bring in millions of more visitors to Cone Island year round, many which will in turn spend money in the neighborhood, eating at the local restaurants, and riding the rides. They suggest casinos could have amusements on the ground floors, or even on their roofs, and therefore would not displace amusement entertainment from the already minuscule amusement center. But would that be the case? I talked with an acquaintance in the casino business who wished to remain anonymous who had a different opinion. Not only wouldn't businesses nearby profit from the influx of visitors, but the casinos would go out of their way to make sure they didn't.

It is all about how casinos make their money, and that is by luring in millions of suckers each year with the false hope of beating the house, and walking away with a small fortune in winnings. And once in the casino, getting them to piss away every dime they have. Lets say the average sucker shows up with $500 in spending money eager to hit the slot machines. In a few hours all their money is spent and off they go, with nothing left over to pay for a ride on the Cyclone. But lets say they decide to experience the amusements at Coney Island first before spending the rest of the day at the casino. Lunch at Nathan's will set them back at least $10. Another $20 would be spent just on the Cyclone and Wonder Wheel. A wrist band for unlimited rides at Luna Park would be another $30. Another $30 could end up being spent on souvenirs. The aquarium, $20. The sideshow, $10. The cheapest attraction in town is the Coney Island Museum at $5 admission fee. Seeing the sights prior to the casino could easily set the sucker back at least $100. That is $100 that they are not going to be pumping into the slot machines, or about 20% of their spending money, and a 20% loss to the casinos.

But the biggest concern to any casino would be the carnival games that line Bowery Street and are throughout the amusement parks. They are games of chance, and could be attractive to the average gambling junkie. It is very possible that someone travels to Coney Island to visit it's casinos, stops to play one of the carnival games, and then spends every dime they have trying to win the giant stuffed polar bear on the top shelf. Luring in gambling addicts is something casinos would like to keep on the down-low. The idea of someone compulsively gambling away his or her entire life savings, the keys to their car, and the deed to their home, leaving their entire family destitute, is an image casinos have been trying to downplay for decades. But the truth is that casinos draw in tens of millions each year from gambling addicts. And they have little sympathy. As far as they are concerned, even if they were able to identify a gambling addict and turn him away at the door, he would just end up in a different casino, losing all his money to the competition.* Carnival games outside the casino could cut heavily into these profits.

Losing profits to outside businesses is a concern that goes back to Las Vegas. The casino's initial concern was the competition from other casinos. An arms race developed where each gambling hall built fancy glitzy facades with flashing light bulbs, neon and the occasional animated sign. Eventually the casinos learned that it was not the other gambling halls they had to worry about. The average visitor arrived with a couple of hundred dollars in spending money, and the expectation they would not lose more than $50 gambling. Their plan was to win big, but if luck was not on their side, stop gambling as soon as they spent their $50 allowance. In reality, they continued gambling believing they could still win back their losses, and they were just one card, dice roll or third gold bar away from a win. Inevitably every cent of their spending money was lost, and occasionally more if the visitor hit the pawn shops before making one last desperate return to the casino.

Since no one came with realistic expectations of losing it all, they had no problem spending most of their cash before hitting the casino. Arriving in town they would first book a hotel room for a few days, then have a meal at a local restaurant, and on that alone end up spending up to half their money. That was about $100 out of the $200 that the casinos were not getting, a 50% loss in revenue. Add to that the shows, bars and other local attractions that were syphoning money off of patrons before they reached the casino. The response was to build bigger casinos that included everything a visitor to the city would want. On site was a four star hotel, a gourmet restaurant, a show that rivaled Broadway or at least featured a famous celebrity, and all the free alcohol you could drink. The idea was to get visitors to spend every cent of their money in the same place, then ask them to leave once the money ran out.

Coney Island is different. While Vegas did dabble with amusements to attract more families, those amusements were built on casino property. The amusements at Coney Island would be outside casino property, stationed in between the train station and their front doors. It would be in the best interest for any casino to shuttle patrons past the amusement zone. Coney Island is at least an hour by public transportation from Manhattan. But by express shuttle bus, less than 20 minutes. A Coney island casino would most likely offer free shuttle bus service every half hour, one at the Port Authority Bus Terminal gathering the arriving out of town patrons, the other near the Battery. These buses would terminate inside casino property, right next to the main entrance, enticing visitors to patronize the casino first. Even those arriving by their own vehicles would use the casino's free parking garage. The only pedestrian exit would be through the casino, once again enticing visitors to patronize the casino first.

Once inside the casino, patrons would most likely run through all their cash. They would have little or no spending money by the time they left the casino, and would probably be in no mood for amusements. In fact, casinos across the country have failed to help local businesses. Anti-casino activists have even suggested that casinos hurt local businesses. Neighborhood residents who blow their savings in one day of gambling end up with no spending money for months. The casino becomes dad's favorite pastime then the kids can kiss any money for the amusement parks goodbye. Anti-gambling activists have accused casinos of causing poverty in their surrounding towns, and in turn having an adverse effect on businesses who had relied on local residents.

But the greater damage to the amusement district would come from the size of the casino. Forget about the pipe dream of stuffing an entire casino into the Shore Theater. An average casino with hotel would take up two of Coney Island's blocks combined. And that is assuming the city only allows one casino. Two or three casinos would replace the entire amusement district. Additionally, a single casino could expand to the size of the entire amusement district if it was the size and scope of The Bellagio. In 2005 land speculator Joe Sitt proposed to the city building Brooklyn's version of the Bellagio, a resort that would not just engulf the entire amusement district, but would expand across the properties of the new baseball stadium and the New York Aquarium.

Initially the Bloomberg administration was supportive of Sitt's project, and according to some of my sources, even went as far as pressuring the owners of Astroland to sell their property to Sitt. Co-owner Carol Albert, who had wanted to keep the old amusement park running, was in the beginning phases of getting approval to redevelop Astroland into a glass enclosed two tier amusement park. After Sitt announced his plans for his resort the city let Albert know in no uncertain terms that they would not approve her plans, and her family was better off selling to a developer who's plans the city was in favor of. The city was still negotiating with Sitt to redevelop the amusement district into a single resort when he flipped the Albee Square property, a city owned mall that was sold to Sitt far below it's market value after he promised to develop a larger mall on the site. Soon after the city was no longer interested in allowing Sitt to develop anything at Coney Island, fearing after they provided the property and zoning he wanted for his resort he would flip the property to the highest bidder, most likely to build condos and nothing else. If the city was interested in a Bellagio sized resort in 2005 with a questionable developer, then they would approve a Bellagio sized resort and casino if it were being built by a developer like Donald Trump.

It is not just the amusement district that is at risk. Coney Island may be a mile longer than Atlantic City, but only two miles of it's beachfront is public. Sea gate and Manhattan Beach are well to do neighborhoods with private beaches, and property owners with deep political connections. The remaining amusement district is only a half mile in distance from the Parachute Jump to the Cyclone. the compact size of Coney Island means that any development of a casino strip would mean tearing down residential buildings along Surf Avenue. This would include the demolition of housing projects for the poor, along with the displacement of the thousands of residents who live there. In Atlantic City, the Casino Reinvestment Development Authority has been abusing their use of eminent domain for decades. Atlantic City residents have lost property to casino developers, often being paid a quarter of their properties value as compensation.

The CRDA made the national headlines in 1993 when, at the behest of Donald Trump, they attempted to size the property of Vera Coking so that it could be used to expand Trump's parking lot. More recently the CRDA has proposed the seizure of 62 homes, to be demolished and replaced with Boutiques, upscale restaurants and luxury condominiums. All at the behest of the new Revel Casino which does not like the poor neighborhood abutting their property. The casinos were suppose to save the poor neighborhoods of Atlantic City. The promised money those casinos would bring to the local neighborhoods never materialized. Now the casino owners seek to demolish those poor neighborhoods and drive the residents off. The same fate could easily befall the poor neighborhoods of Coney Island.

*Anti-gambling activists do not buy this line of reasoning. They point out that casinos go out of their way to identify card counters and give them a lifetime ban from the premises.